by Brightface Mutema
The topic of Zimbabwe adopting the South African Rand and subsequently joining the Rand Common Monetary Area (CMA) has been debated for quite a long time now.
The idea has had takers and opposers both proffering compelling arguments. But as the reality is fast dawning on us in light of latest international relations with America, one is forced to rethink and redefine the trajectory.
One would wonder what this CMA is and if there are any benefits therein adopting the idea. The Common Monetary Area (CMA) links South Africa, Namibia, Lesotho and Swaziland into a monetary union. It is allied to the Southern African Customs Union (SACU). The main purpose of this trade is that all of the parties can have the same development and equitable economic advancement.
Washington decided to renew sanctions against Zimbabwe in yet another “Big brother” show that cannot go unchallenged and at the same time pushing us to think outside the box. Life after the United States dollar is what Zimbabwe need now more than ever. Why can’t we try to forget the rest and as a temporary measure, adopt the Rand as our main currency?
Of cause, the major argument that has been trendy on why Zimbabwe should not join the CMA has been the loss of sovereignty that comes with such a move. This however, does not necessarily entail us dumping our nationality and identity to adopt South Africa’s. The sovereignty only applies to us giving up our own monetary policies and adopt those of South Africa since it is the one controlling the Union. This is not permanent and is worthy trying in light of what faces us a nation.
South Africa has proved to be our real brother and our all- weather friend just like China. It is our leading trading partner. As if that is not enough, most Zimbabweans who live outside the country are residents in South Africa. In short, without much economics background, even a layman would see the necessity of Zimbabwe formally joining the Rand economy.
President Mnangagwa has been given a full five year mandate to turn around the fortunes of the country. Consequently, he has been slapped with fresh sanctions by the US all in an effort to scuttle his economic endeavours. But all doors are not shut to the President as the generality of Zimbabweans are eagerly awaiting him to deliver. Let us join the CMA and get the economy going!
So there we are, Zimbabwe needs to rise up from the economic doldrums that it has been languishing in for close to two decades. The country has been without its own currency for long now which should also mark the thrust while the Rand helps us to reach that milestone. We need to exploit the advantages brought by the CMA. These are, but not limited to, favourable transaction cost, Investment promotion, and exchange rate stability due to common currency.
If the transaction costs which impede smooth flow of business are put on the check, it can easily become profitable to do business. Large amounts of investment can also be realised because there would be this decrease in the cross border investment costs. For Zimbabwe economy to kick start again, it is this investment that we need.
There can also be exchange rate stability. Because of the common currency it means the problem of money changers who are a common sight in most of our towns and cities could automatically have been dealt with. The welcome consequences can be witnessed in price stability which can help the ordinary Zimbabwe to project life and budget. That way, even the Zanu PF government can be able to charm the urban electorate that is predominantly opposition.
By and large, CMA can keep peace between the nations as they would now be binded by the reality that they are all interdependent on each other. So in short, countries in the CMA can treat each other as true brothers unlike what America has shown to us
